Maryland Ponzi Scheme Goes Bust, People Jailed; Accomplice Cast "Hoodoo Spells" On Feds
09/06/2019
Several people from Maryland have been jailed for their role in a multi-million-dollar Ponzi scheme that defrauded investors, reported The Baltimore Sun.
U.S. District Judge Paula Xinis recently sentenced Bradley Mascho, 53, of Frederick, to 2.5 years in federal prison.
U.S. Attorney Robert Hur's office told the press that Mascho had been ordered by the court to pay $5 million in restitution.
In July, Xinis sentenced investment adviser Dawn Bennett, 56, to 20 years of federal prison for her role in the scheme.
Jurors during the two-week trial heard testimony that Bennett used investors' money to buy astrological gems and cosmetic medical procedures. She even paid Hindu priests in India more than $800,000 to ward off federal investigators while the Ponzi scheme imploded.
According to an FBI agent's affidavit, there was evidence found inside Bennett's home that showed she tried to silence the U.S. Securities and Exchange Commission (SEC) investigators by casting "hoodoo spells." She wove spells around jars of beef tongue, labeled with SEC Lawerys' names that she stored in a freezer in her kitchen in hopes of keeping the Feds quiet.
Justice Department prosecutor Erin Pulice claims that Bennett defrauded 46 investors out $20 million in three years.
"Dawn Bennett knowingly defrauded retirees of their life's savings – most of which she used for her own personal benefit," U.S. Attorney Robert K. Hur said in a statement."She's been held accountable for her lies and theft and will now spend years in federal prison."
Mascho pleaded guilty last summer to charges of conspiracy to commit securities fraud and making a false statement.
Dennis Boyle, Bennett's defense attorney at trial, tried to convince the court that Mascho defrauded Bennett. Boyle said, Bennett, invested $8 million of her own money into the venture and relied on falsified accounting prepared by Mascho, her company's chief financial officer.
The Feds started investigating Bennett's scheme in 2015 after the SEC accused her of defrauding investors by inflating assets and falsifying returns.
Bennett promised investors a 15% return on investments in her new sportswear company but spent the money on her extravagant lifestyle.
Bennett's life of crime began when she first appeared in Barron's in 2009 on its list of "Top 100 Women Financial Advisors." Her claim to fame was $1.1 billion in AUM ranked her fifth on the list. The SEC said she made another submission to Barron's, this time for its list of "Top 100 Independent Financial Advisors." She listed her AUM as $1.3 billion and she was ranked 26th.
However, Barron's never verified Bennett's AUM claims -- allowed her to appear on radio talk shows promoting her fake AUM and returns.
According to the SEC, Bennett submitted another application to Barron's, this time for its "2011 Top Advisor Rankings: Washington D.C." She claimed her AUM had risen to $1.8 billion, which "earned" her a No. 2 ranking.
Again, there was little accountability at Barron's who never verified her AUM.
The SEC said Bennett inflated performance returns for clients, and at one point, claimed that her firm was "top 1%" of financial advisers.
Bennett's decade of white-collar crime has finally come to an end in the implosion of her Ponzi scheme. She won't be released from prison until 2039.
https://www.zerohedge.com/news/2019-09-04/maryland-ponzi-scheme-goes-bust-people-jailed-accomplice-cast-hoodoo-spells-feds
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